If a Company Uses the Periodic Inventory System, Purchases of Merchandise

question 20

Multiple Choice

If a company uses the periodic inventory system, purchases of merchandise are

• A)credited to Merchandise Inventory.
• B)credited to Sales.
• C)debited to Purchases.
• D)debited to Merchandise Inventory.

Understand the procedures and significance of controlling cash receipts and payments.

Recognize the use and purpose of a voucher system in internal controls.

Understand basic bank services and their roles in controlling cash.

Recognize the purpose and process of a voucher system in controlling cash payments.

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Definitions:

Nondurable Goods

Items that are consumed or wear out quickly and have a short lifespan, such as food, beverages, and paper products.

Specialty Products

Items that the consumer makes a special effort to search out and buy.

Nondurable Goods

Items that are consumed or wear out rapidly and are expected to last for a short period, such as food, paper products, and most consumer goods.

Durable Goods

Products that are not consumed or destroyed in use and thus have a long life-span, such as cars and appliances.